What is the difference between perpetual futures and traditional futures on FTX?

3 answers

• Desai BeierOct 16, 2023 · 2 years ago
  Perpetual futures and traditional futures are both derivative contracts that allow traders to speculate on the price movements of an underlying asset. However, there are several key differences between the two on the FTX platform. Perpetual futures do not have an expiration date, which means that traders can hold their positions indefinitely. This makes them popular among traders who want to take long-term positions or hedge their existing holdings. Traditional futures, on the other hand, have a fixed expiration date, after which the contract settles. Another difference is the funding mechanism. Perpetual futures use a funding rate to ensure that the price of the contract closely tracks the spot price of the underlying asset. This funding rate is exchanged between long and short positions every few hours. Traditional futures, on the other hand, do not have a funding mechanism and their prices are determined solely by supply and demand in the market. In terms of trading fees, perpetual futures on FTX usually have lower fees compared to traditional futures. This can be advantageous for high-frequency traders or those who trade with larger volumes. Overall, the choice between perpetual futures and traditional futures on FTX depends on the trader's strategy and preferences. Perpetual futures offer more flexibility and lower fees, while traditional futures have a fixed expiration date and their prices are solely determined by market forces.
  1463

  732
• elisier hastreiterAug 07, 2024 · 2 years ago
  Perpetual futures and traditional futures are two different types of derivative contracts available on the FTX platform. Perpetual futures are designed to mimic the price of the underlying asset, while traditional futures have a fixed expiration date. One advantage of perpetual futures is that they do not expire, allowing traders to hold their positions for as long as they want. This can be beneficial for long-term investors or those who want to hedge their positions. Traditional futures, on the other hand, have a fixed expiration date, after which the contract settles. Another difference is the funding mechanism. Perpetual futures use a funding rate to ensure that the price of the contract closely tracks the spot price of the underlying asset. This funding rate is exchanged between long and short positions every few hours. Traditional futures, on the other hand, do not have a funding mechanism and their prices are solely determined by supply and demand in the market. When it comes to trading fees, perpetual futures on FTX usually have lower fees compared to traditional futures. This can be advantageous for traders who trade frequently or with larger volumes. In conclusion, perpetual futures and traditional futures on FTX offer different features and advantages. Traders should consider their trading strategy and preferences when choosing between the two.
  1380

  460
• Rahul RanaNov 23, 2024 · a year ago
  Perpetual futures and traditional futures are two types of derivative contracts available on the FTX platform. Perpetual futures are unique because they do not have an expiration date, allowing traders to hold their positions indefinitely. This makes them popular among traders who want to take long-term positions or hedge their existing holdings. On the other hand, traditional futures have a fixed expiration date, after which the contract settles. Another difference is the funding mechanism. Perpetual futures use a funding rate to ensure that the price of the contract closely tracks the spot price of the underlying asset. This funding rate is exchanged between long and short positions every few hours. Traditional futures, on the other hand, do not have a funding mechanism and their prices are solely determined by supply and demand in the market. In terms of trading fees, perpetual futures on FTX usually have lower fees compared to traditional futures. This can be advantageous for high-frequency traders or those who trade with larger volumes. Overall, the choice between perpetual futures and traditional futures on FTX depends on the trader's strategy and preferences. Perpetual futures offer more flexibility and lower fees, while traditional futures have a fixed expiration date and their prices are solely determined by market forces. It's important for traders to understand these differences and choose the contract type that aligns with their trading goals.
  1482

  371